Concurrently, Moody's has affirmed and changed to stable, from negative, the outlook on the Ba2 ratings of the backed senior unsecured debt of Investcorp's wholly owned subsidiaries, Investcorp Capital and Investcorp S.A.

The rating agency also affirmed the (P) Ba2 rating of Investcorp Capital's backed senior unsecured medium-term note (MTN) programme, all of which are guaranteed by Investcorp. Investcorp's Not-Prime short term rating was also affirmed.

In its review, Moody's said the primary driver for the rating action was the material deleveraging of the balance sheet of Investcorp, a licensed wholesale bank in Bahrain that provides access to (and manages) global alternative investments.

Investcorp's debt levels too declined to $1.2 billion as of June 2013, from $2.6 billion in June 2009. As a consequence, over the same period, the company's market funding-to-tangible common equity ratio declined to around 1.7x, from 4.2x.

In light of Investcorp's debt deleveraging and its successful debt refinancing over the past two years, its cash balances now exceed debt obligations maturing over the next four years, the ratings agency stated.

Its investment portfolio declined to 1.9x shareholder equity at end-June 2013, from 2.9x in June 2009, affording the company greater flexibility to withstand adverse market developments, said Moody's in its statement.

In addition, the company has reduced its investment concentrations, with only one corporate investment exceeding 10 per cent of shareholder equity as of June 2013 (according to company disclosures).-TradeArabia News Service